Judge James C. Chalfant, Case 22STCP00008 2023-02-14 Tentative Ruling

Petitioner Hangar Holdco, LP (“Hangar”) seeks a writ of mandate compelling Respondents City of Los Angeles (“City”), Los Angeles Housing Department, Ann Sewill, Marcella DeShurley, Robert Klepa, Edward Jacobs (collectively, “LAHD”), the Rent Adjustment Commission of the City of Los Angeles (“RAC”), Wilshire Escrow Company (“Wilshire”), and Leslie Lim (“Lim”) to (1) set aside its decision that Real Party-in-Interest Carl Downing (“Downing”) is entitled to disbursement of $16,462 in escrow and (2) amend invalid RAC regulations pertaining to the timing of the release of escrowed relocation funds.

The court has read and considered the moving papers,[1] opposition, and reply, and renders the following tentative decision.

Petitioner Hangar commenced this proceeding on January 3, 2022, alleging causes of action for traditional and administrative mandamus. The Petition alleges in pertinent part as follows.

Petitioner Hangar is the owner and lessor of property located at 4206 and 4208 Franklin Avenue, Los Angeles, California (the “Property”). Petition, ¶15. Downing is a former tenant at the Property. Petition, ¶16.

On November 13, 2018, Hangar filed an Ellis Act package with the City to permanently remove the two rental units from the rental market. Petition, ¶15. Hangar escrowed $10,750 with Wilshire for Downing’s Ellis Act relocation benefits. Petition, ¶18.

On November 13, 2018, Hangar served Downing with an Ellis Act 120-day Notice to Quit. Petition, ¶18. Downing submitted a request for an extension because he was disabled. Petition, ¶19. Hangar granted the request, and Downing’s new date to vacate became November 13, 2019. Ibid.

On December 13, 2018, the City, through its relocation vendor, determined that Downing was an Eligible Tenant entitled to $10,750 in relocation benefits. Petition, ¶20. Downing appealed that determination, arguing he was entitled to a $20,450 relocation benefit because he was a Qualified Tenant. Petition, ¶21.

LAHD held a hearing on Downing’s appeal. Petition, ¶22. On January 30, 2019, LAHD issued a written decision in Downing’s favor, agreeing that he was entitled to the higher Qualified Tenant relocation benefit of $20,450. Ibid.

In early February 2019, Hangar increased the amount escrowed with Wilshire to $20,450. Petition, ¶23. Downing drew from the escrowed relocation funds in the amount of $1,620 on December 14, 2018, and $2,368 on June 7, 2019, leaving $16,462 in the escrow account. Petition, ¶24.

Hangar filed an unlawful detainer action against Downing premised on the Ellis Act notice. Petition, ¶26. On April 1, 2020, Hangar voluntarily dismissed the action without prejudice because of the Covid-19 shut-down. Ibid.

On April 29, 2020, Hangar served Downing with a three-day notice to pay rent or quit for the months of October 2019 through February 2020 – i.e., pre-COVID-19 rent -- totaling $12,000. Petition, ¶27.

On May 17, 2020, Hangar commenced an unlawful detainer action based on rent owed. Petition, ¶29. Downing was evicted from his unit on August 3, 2021. Petition, ¶32. On August 21, 2021, Downing requested the remaining $16,462 in the escrow account. Petition, ¶33.

Without copying Hangar, Wilshire sent a September 3, 2021 letter to LAHD pursuant to the dispute resolution provisions of the RAC Regulations. Petition, ¶36. LAHD responded to Wilshire in a September 16, 2021 letter without copying Hangar in violation of RAC regulations. Petition, ¶¶ 38-39.

Hangar received a copy of this letter on October 8, 2021. Petition, ¶¶ 39-42. That day, Hangar filed an appeal of LAHD’s September 16, 2021 decision. Petition, ¶43. The appeal hearing occurred on November 18, 2021. Petition, ¶46. Hangar argued that Downing was not entitled to the $16,462 funds remaining in escrow because he had not been evicted under the Ellis Act in November 2019. Instead, he was evicted in August 2021, almost two years later, for his failure to pay rent. Petition, ¶47. On December 3, 2021, the hearing officer issued a decision denying Hangar’s appeal. Petition, ¶49, Ex. A.

Hangar contends that the hearing officer’s decision is an abuse of discretion, denied Hangar a fair trial, and is not supported by the findings or evidence. Ibid. Hangar seeks a writ of administrative mandamus to set aside the decision. Petition, Prayer ¶1. Hangar also seeks traditional mandamus compelling the amendment of RAC regulations relating to the release of escrowed relocation funds. Petition, Prayer ¶2.

On February 14, 2022, the City filed its Answer and filed an Amended Answer on April 18, 2022.

On October 20, 2022, the court denied Hangar’s motion to augment the record with emails and requests for admissions, with the caveat that it may provide 12-point font versions of emails already in the record. Hangar did not choose to do so.

A party may seek to set aside an agency decision by petitioning for either a writ of administrative mandamus (CCP §1094.5) or of traditional mandamus.¿ CCP §1085.¿ A petition for traditional mandamus is appropriate in all actions “to compel the performance of an act which the law specially enjoins as a duty resulting from an office, trust, or station....”¿ CCP §1085.¿¿¿

A traditional writ of mandate under CCP section 1085 is the method of compelling the performance of a legal, ministerial duty.¿ Pomona Police Officers’ Assn. v. City of Pomona, (1997) 58 Cal.App.4th 578, 583-84.¿ Generally, mandamus will lie when (1) there is no plain, speedy, and adequate alternative remedy, (2) the respondent has a duty to perform, and (3) the petitioner has a clear and beneficial right to performance.”¿ Id. at 584 (citations omitted).¿ Whether a statute imposes a ministerial duty for which mandamus is available, or a mere obligation to perform a discretionary function, is a question of statutory interpretation.¿ AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health, (2011) 197 Cal.App.4th 693, 701.¿

¿Where a duty is not ministerial and the agency has discretion, mandamus relief is unavailable unless the petitioner can demonstrate an abuse of that discretion.¿ Mandamus will not lie to compel the exercise of a public agency’s discretion in a particular manner.¿ American Federation of State, County and Municipal Employees v. Metropolitan Water District of Southern California, (2005) 126 Cal.App.4th 247, 261.¿ It is available to compel an agency to exercise discretion where it has not done so (Los Angeles County Employees Assn. v. County of Los Angeles, (1973) 33 Cal.App.3d 1, 8), and to correct an abuse of discretion actually exercised. Manjares v. Newton, (1966) 64 Cal.2d 365, 370-71.¿ In making this determination, the court may not substitute its judgment for that of the agency, whose decision must be upheld if reasonable minds may disagree as to its wisdom.¿ Id. at 371.¿ An agency decision is an abuse of discretion only if it is “arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair.”¿ Kahn v. Los Angeles City Employees’ Retirement System, (2010) 187 Cal.App.4th 98, 106.¿ A writ will lie where the agency’s discretion can be exercised only in one way.¿ Hurtado v. Superior Court, (1974) 11 Cal.3d 574, 579.

No administrative record is required for traditional mandamus to compel performance of a ministerial duty.¿

CCP section 1094.5 is the administrative mandamus provision which structures the procedure for judicial review of adjudicatory decisions rendered by administrative agencies. Topanga Ass’n for a Scenic Community v. County of Los Angeles, (“Topanga”) (1974) 11 Cal.3d 506, 514-15.

CCP section 1094.5 does not in its face specify which cases are subject to independent review, leaving that issue to the courts. Fukuda v. City of Angels, (1999)20 Cal.4th 805, 811. In cases reviewing decisions which affect a vested, fundamental right the trial court exercises independent judgment on the evidence. Bixby v. Pierno, (1971) 4 Cal.3d 130, 143. See CCP §1094.5(c). In other cases, the substantial evidence test applies. Mann v. Dept. of Motor Vehicles, (1999) 76 Cal.App.4th 312, 320; Clerici v. Dept. of Motor Vehicles, (1990) 224 Cal.App.3d 1016, 1023.

A right may be deemed fundamental based on either (1) “the character and quality of its economic aspect; (2) the character and quality of its human aspect.” Amerco Real Estate Co. v. City of West Sacramento, (“Amerco”) (2014) 224 Cal.App.4th 778, 783 (citation omitted). This is a case-by-case determination. Termo Company v. Luther, (2008) 169 Cal.App.4th 394, 398-99 (independent judgment test applies where implementation of the agency’s decision and order to shut down and abandon oil wells would shut down the petitioner’s oil well business that had been in existence for 20 years). Compare Standard Oil v. Feldstein, (1980) 105 Cal.App.3d 590, 604 (substantial evidence test applied where there was no contention oil company will be driven to ruin by the agency action); Mobil Oil Corp. v. Superior Court, (1976) 59 Cal.App.3d 293, 305 (same).

“[A]s a general rule, when a case involves or affects purely economic interests, courts are far less likely to find a right to be of the fundamental vested character." JKH Enterprises, Inc. v. Department of Industrial Relations, (2006) 142 Cal.App.4th 1046, 1060 (impact of agency’s decision to issue an administrative stop work order and penalty for violation labor relations was purely economic and the substantial evidence was appropriate standard of review). The substantial evidence test applies to review administrative decisions that restrict a property owner’s return on investment, which increase the cost of doing business, or reduce profits, because such decisions impact mere economic interests rather than fundamental rights. In contrast, a court will apply its independent judgment where the administrative decision will drive the owner out of business or significantly injure its ability to function. Amerco, supra, 224 Cal.App.4th at 784 (land use decision that U-Haul could not maintain overlarge sign governed by substantial evidence test).

Although Hangar suggests otherwise (Reply at 4), this case does not implicate its fundamental rights. The RAC’s decision to release escrowed impacts Hangar’s right to a fair return on its property, making substantial evidence the proper standard for this case. See San Marcos Mobilehome Park Owners’ Assn. v. City of San Marcos, (1987) 192 Cal.App.3d 1492, 1500 (city’s denial of rent increase subject to substantial evidence standard of review).

“Substantial evidence” is relevant evidence that a reasonable mind might accept as adequate to support a conclusion (California Youth Authority v. State Personnel Board, (“California Youth Authority”) (2002) 104 Cal.App.4th 575, 585) or evidence of ponderable legal significance, which is reasonable in nature, credible and of solid value. Mohilef v. Janovici, (1996) 51 Cal.App.4th 267, 305, n.28. The petitioner has the burden of demonstrating that the agency’s findings are not supported by substantial evidence in light of the whole record. Young v. Gannon, (2002) 97 Cal.App.4th 209, 225.

The trial court considers all evidence in the administrative record, including evidence that detracts from evidence supporting the agency’s decision. California Youth Authority, supra, 104 Cal.App.4th at 585. “‘[T]he test of substantiality must be measured on the basis of the entire record, rather than by simply isolating evidence which supports the board and ignoring other relevant facts of record which rebut or explain that evidence.’ [Citations.]” Martori Brothers Distributors v. Agricultural Labor Relations Bd., (1981) 29 Cal.3d 721, 727 (italics added.)” Gerawan Farming, Inc. v. Agric. Labor Relations Bd., (2018) 23 Cal.App.5th 1129, 1162. The standard is met if there is relevant evidence in the record which a reasonable mind might accept in support of the findings. Id. (citation omitted). If there is a plausible basis for the decision, the fact that contrary findings may be equally reasonable, or even more so, is of no moment. Id.

The agency’s decision must be based on the evidence presented at the hearing. Board of Medical Quality Assurance v. Superior Court, (1977) 73 Cal.App.3d 860, 862. The hearing officer is only required to issue findings that give enough explanation so that parties may determine whether, and upon what basis, to review the decision. Topanga, supra, 11 Cal.3d at 514-15. Implicit in section 1094.5 is a requirement that the agency set forth findings to bridge the analytic gap between the raw evidence and ultimate decision or order. Id. at 515.

An agency is presumed to have regularly performed its official duties (Evid. Code §664), and the petitioner therefore has the burden of proof. Steele v. Los Angeles County Civil Service Commission, (1958) 166 Cal.App.2d 129, 137. “[T]he burden of proof falls upon the party attacking the administrative decision to demonstrate wherein the proceedings were unfair, in excess of jurisdiction or showed prejudicial abuse of discretion.” Afford v. Pierno, (1972) 27 Cal.App.3d 682, 691.

On May 1, 1979, the City passed the Rent Stabilization Ordinance (“RSO”). The RSO’s declaration of purpose stated that substantial numbers of renters were unable to find decent, safe and sanitary housing at affordable rent levels and the attempts of renters to pay increased rents often meant reduced spending on other necessities. LAMC §151.01. The purpose of the RSO is to safeguard tenants from excessive rent increases, while at the same time providing landlords with just and reasonable returns from their rental units. LAMC §151.01.

The “Department” responsible for enforcement of the RSO is LAHD, formerly the Los Angeles Housing and Community Investment Department. LAMC §151.02; LAAC §§ 22.600, 22.601(k).

The RSO authorized the RAC to issue orders and promulgate policies, rules, and regulations to effectuate the RSO’s purposes. LAMC §151.03(B).

Under the RSO, no landlord may demand, accept, or retain more than the maximum adjusted rent permitted pursuant to the RSO or the RAC’s regulations or orders adopted pursuant thereto. LAMC §151.04(A). LAHD and the RAC do not need to give permission for a landlord to increase the maximum rent or maximum adjusted rent for a rental unit under specified circumstances. LAMC §151.06.

Under the RSO, a landlord may terminate a tenancy only for a just cause listed in LAMC § 151.09(A). As relevant here, a “just cause” includes when “[t]he landlord seeks in good faith to recover possession of [a] rental unit . . . to remove the rental unit permanently from rental housing use,” under the Ellis Act (Govt. Code §7060 et seq.). LAMC §§ 151.09(A)(10), 151.22. The landlord must comply with the procedures in LAMC section 151.22 et seq., which includes filing papers with LAHD (LAMC §151.23) and notifying the tenant that the property will be withdrawn from rental housing. LAMC §151.23.C. The notice must be as described in Civil Code section 1946 or CCP sections 1161 and 1161a. Id.

A landlord removing a rental unit from the housing market under the Ellis Act must pay relocation assistance to the tenant. LAMC § 151.09(G). The landlord shall pay a relocation fee of: $16,650 to qualified tenants and a $7,900 fee to all other tenants who have lived in their rental unit for fewer than three years; $19,700 to qualified tenants and a $10,400 fee to all other tenants who have lived in their rental unit for three years or longer; or $19,700 to qualified tenants and $10,400 to all other tenants whose household income is 80% or below Area Median Income, as adjusted for household size, as defined by the U.S. Department of Housing and Urban Development, regardless of length of tenancy. LAMC §151.09(G). A tenant may raise the landlord’s failure to provide the required relocation assistance as an affirmative defense to eviction. LAMC §151.09(H).

The landlord shall provide the relocation assistance within 15 days of service of the landlord’s notice terminating the tenancy under Civil Code section 1946. LAMC §151.09(G)(2). “[h]owever, the landlord may in its sole discretion elect to pay the relocation benefits “to an escrow account to be disbursed to the tenant upon certification of vacation of the rental housing unit.” LAMC §151.09(G)(2). The escrow account “shall provide for the payment prior to vacation of all or a portion of the monetary relocation benefits for actual relocation expenses incurred or to be incurred by the tenant prior to vacation….” LAMC §151.09(G)(2).

The escrow account “shall provide that, in the event of disputes between the landlord and the tenant as to the release of funds from escrow, the funds in dispute shall be released to [LAHD] for final determination.” LAMC §151.09(G)(2). The RAC shall establish guidelines for the establishment of escrow accounts, the certification of vacation, and pre-vacation disbursement requests. LAMC §151.09(G)(2).

Under the RSO, owners must pay tenants a relocation fee if (a) the owner evicts a tenant so that the owner, the owner’s family, or a resident manager may occupy the subject rental unit pursuant, (b) the tenant elects to permanently relocate from the rental unit pursuant to a Tenant Habitability Plan, (c) the owner evicts the tenant in order to permanently remove the rental unit from the rental market, (d) the owner evicts the tenant to demolish the rental unit; (e) the owner evicts the tenant to comply with a government order to vacate, order to comply, order to abate, or any other order which necessitates the vacation of the rental unit, or (f) the owner is the Secretary of Housing and Urban Development and evicts a tenant to vacate the property prior to sale. RAC Regulation §962.01.

At the owner’s sole discretion, the owner may pay the relocation fee due to a tenant pursuant to LAMC section 151.09.G by depositing the fee in an escrow account within 15 days of service of a notice of termination of tenancy. RAC Regulation §964.01.

The escrow account shall provide for payment to the tenant(s) for actual relocation expenses incurred or to be incurred by the tenant prior to vacating the unit. RAC Regulation §965.01. The escrow instructions shall require a vacating tenant to sign an affidavit confirming vacation of the unit, the date of such vacation, and the tenant’s forwarding mailing address. RAC Regulation §966.01. The affidavit will also include a statement that the tenant has permanently departed from the unit and surrendered the keys to the landlord. RAC Regulation §966.01. The escrow instructions shall provide for the release of all remaining funds owing to the tenant within three business days of presentation of the affidavit. RAC Regulation §966.02.

The escrow instructions must state that the owner and the escrow holder will indemnify and hold harmless the City and its employees, and any hearing officers selected by the LAHD, from all liability. RAC Regulation §964.04(f). The RAC Regulations include sample escrow instructions compliant with the Regulations. Pet. RJN Ex. 104; AR 595-97.

The owner may request return of any remaining escrow funds to the owner only if the tenants are in legal possession of the subject unit and the eviction is no longer in process, or if the tenants have vacated the subject unit and unclaimed funds remain in escrow 65 days after the date the tenants vacated the unit. RAC Regulation §969.03.

The escrow instructions shall contain a dispute resolution procedure that provides for LAHD to resolve disputes as to the disbursement of funds. RAC Regulation §967.01. At the request of any of the tenants, the landlord, or the escrow holder, the escrow holder shall notify LAHD of the dispute, the reason for the dispute, and the amount in dispute. RAC Regulation §967.02. The escrow holder shall notify LAHD, to the attention of the Director of the Rent Division, within five business days of the request for LAHD to resolve the dispute. RAC Regulation §967.03. The disputed amount shall not be released pending a final determination by LAHD. RAC Regulation §967.04. LAHD shall contact the parties within five working days of the escrow holder’s notification to conduct an investigation. RAC Regulation §967.05. LAHD shall issue a determination regarding the disbursement of the disputed funds within 15 days of notification by the escrow holder of the dispute. RAC Regulation §967.06.

Any party to the dispute may appeal LAHD’s determination within ten days of LAHD’s mailing of its determination. RAC Regulation §968.01. LAHD’s determination is stayed until the appeals deadline has expired or, if an appeal is filed, until a decision by a hearing officer. RAC Regulation §968.01. The appeal must state why the appellant believes LAHD erred in its determination. RAC Regulation §968.02.

LAHD shall conduct a hearing by a hearing officer designated by LAHD within 30 days of the appeal filing date. RAC Regulation §968.03. LAHD shall notify the escrow holder, the owner, and the tenants of the time and place at least ten days before the hearing. RAC Regulation §968.04. All parties may submit documents, testimony, written declarations, or other relevant evidence. RAC Regulation §968.05. The hearing officer shall issue a determination within ten working days of the appeal hearing. RAC Regulation §968.06. The hearing officer’s determination will be the final administrative determination for the dispute. RAC Regulation §968.07.

On March 31, 2020, the City passed Ordinance 186585, memorialized in LAMC section 49.99. Pet. RJN Ex. 101. Ordinance 186585 prohibited evictions of residential tenants for failure to pay rent during the Local Emergency Period due to circumstances related to the COVID-19 pandemic. The Local Emergency Period would run from March 4, 2020 to the end of the local emergency as declared by the Mayor. Tenants would have up to 12 months after the expiration of the Local Emergency Period to repay past due rent.

On May 6, 2020, the City passed Ordinance 186606 prohibiting eviction of residential tenants during the COVID-19 pandemic on the same terms as Ordinance 186585. Pet. RJN Ex. 102 (LAMC §§ 49.99.1-49.99.2(A)). It also provided that the owner could not endeavor to evict or evict a residential tenant for a no-fault reason during the Local Emergency Period. LAMC §§ 49.99.2(B).

Hangar has been the owner of the Property since September 2018. AR 16, 21. On November 13, 2018, Hangar filed with LAHD a Notice of Intent to Withdraw any units at the Property from the rental market under the Ellis Act. AR 16. The notice listed Downing as the tenant in Unit Number 4206. AR 17.

Pursuant to the City’s Ellis Act forms, in November 2018 Hangar escrowed $10,750 with Wilshire for Downing’s relocation benefits. AR 96-101.

Hangar’s agent signed the City’s form escrow instructions. AR 99. Under the escrow instructions, each tenant shall sign an affidavit after he permanently vacates his unit. AR 97. The affidavit will indicate the date on which he vacated the unit and his current mailing addresses. AR 97. The affidavit also will confirm that the tenant had returned his keys to the landlord. AR 97. Once Wilshire receives the affidavit, it shall release payment of all remaining funds to the tenant within three business days. AR 97.

When there is a dispute about the escrowed funds, Wilshire shall release payment only pursuant to LAHD’s final determination of the dispute in accordance with RAC Regulation 960.00 et seq.” AR 97.

If funds remain in the escrow account 65 days after the tenant vacates his unit, Hangar can request return of all undisbursed funds and closure of the escrow account. AR 97. Wilshire will notify the tenant that it received this request by registered mail to the tenant’s last known mailing address. AR 97. Wilshire will release the funds to Hangar and close the account only if the tenant does not notify Wilshire of a dispute within ten business days of Wilshire’s written notice. AR 97.

In the event of a dispute regarding release of escrow funds, Wilshire shall request LAHD to resolve the dispute. AR 97. Wilshire shall provide LAHD with written notice of the dispute, the reason for the dispute, and the amount in dispute. AR 97. Wilshire will release payment of the disputed amount only pursuant to the LAHD’s final determination thereof. AR 97.

Hangar agreed to indemnify and hold the City and any hearing officer harmless from all liability that results from its resolution of a dispute. AR 97. The instructions incorporated RAC Regulations 960 through 969.05 and stated that the RAC Regulations shall prevail if there is any conflict between them and the escrow instructions. AR 99.

On November 13, 2018, Hangar served Downing with 120-day notice to quit the premises and terminate his tenancy under Civil Code section 1946. AR 31. Downing was warned that, if he failed to vacate, Hangar could file an unlawful detainer action to recover the premises, declare any lease forfeited, and recover damages. AR 31.

On December 3, 2018, Downing submitted to Hangar a request to extend his tenancy by one year, asserting that he is disabled as defined in Govt. Code section 12955.3 and entitled to the extension under LAMC section 151.23(B). AR 50. HDLA confirmed to Hangar on January 29, 2019 that Downing was entitled to this extension and that Hangar’s failure to honor it would violate the RSO. AR 83. According to Hangar, it granted the request.[3]

On December 13, 2018, the City’s relocation vendor, CPSI, determined that Downing was an Eligible Tenant and entitled to $10,750 in relocation benefits. AR 55.

On December 21, 2018, Downing appealed the relocation benefit determination of $10,750 based on his disability. AR 65. He contended that a CPSI consultant had approved his disability only to reverse her decision without notice, so Downing did not have a chance to provide additional documentation. AR 65. To support the appeal, Downing submitted a letter from his service provider that attested to his condition. AR 62. Downing argued that he should be considered a Qualified Tenant, which would entitle him to a higher $20,450 relocation benefit amount. AR 61, 65.

HDLA held a General Manager’s hearing on Downing’s appeal on January 25, 2019. AR 68. On January 30, 2019, the hearing officer issued a decision that Downing was a Qualified Tenant with a disability under LAMC section 151.02. AR 68, 71. Downing was entitled to $20,450 in relocation assistance as a Qualified Tenant with a disability who resides at a property and has been there for more than three years. AR 71, 81.

To comply with the January 2019 decision, Hangar amended the escrow instructions to reflect that it was depositing the additional $9,700 in relocation benefits. AR 101.

Downing drew from the escrow account $1,620 on December 14, 2018 and $2,368 on June 7, 2019, leaving a balance of $16,462. AR 395. On August 19, 2019, he sought an additional $4,051.63 to purchase a vehicle. AR 439-42. Wilshire denied the request on August 19, 2019, finding that a car purchase did not comport with the escrow instructions. AR 440.

Downing did not vacate his unit by the extended date in November 2019. Nor did he pay his October 2019 rent. See AR 385. On December 4, 2019, Hangar filed an unlawful detainer action premised on the Ellis Act notice, but voluntarily dismissed the action without prejudice on April 1, 2020. AR 467-68.

On April 29, 2020, Hangar sent Downing a three-day notice to pay $12,000 in unpaid rent from October 2019 to February 2020 or quit the premises. AR 116.

On May 11, 2020, Hangar filed a second unlawful detainer complaint against Downing, this time based on his failure to pay $12,000 in past due rent from October 2019 through February 2020 (pre-COVID rent) at $2400 per month. AR 112-14; see AR 469. The complaint included a declaration from Diana Rodas, Hangar’s authorized representative, which explained that Downing did not enjoy COVID-19 tenant protections. AR 121, 356. Hangar could not accept rent between October 2019 and February 2020 because the first unlawful detainer action that was pending, which Hangar voluntarily dismissed on April 3, 2020. AR 356.

On January 28, 2021, the court entered a default judgment against Downing only for possession of the premises. AR 125-26. On February 10, 2021, the court issued a writ of possession for Downing’s unit on the Property. AR 104.

On August 3, 2021, the Los Angeles Sherriff’s Department (“LASD”) issued a Notice of Eviction for the Property. AR 103. It also issued a receipt of possession in which it stated that it had enforced the court order for possession of the premises. AR 102.

Sometime after the eviction, Hangar asked Wilshire to disburse all remaining escrow funds to it. On August 17, 2021, Wilshire responded via email that the City had explained that the RAC Regulations only allow disbursement of unused funds to a landlord 65 days after the tenant’s permanent vacation of the unit. AR 628. If the tenant has requested the funds and the landlord claims the tenant is no longer entitled to funds, the parties would need to follow the escrow dispute process. AR 628. After October 7, 2021, Wilshire would send notice to Downing per the escrow instructions for the release of funds to Hangar. AR 628.

Hangar replied that it would seek further instructions from counsel because Downing was evicted through a sheriff’s lockout, not the Ellis Act. AR 628. Wilshire responded that the City knew that fact but still recommended that Wilshire follow the escrow instructions. AR 606. Hangar replied that this was incorrect because Downing was evicted for failure to pay rent and did not voluntarily vacate. AR 606. It requested that Wilshire initiate the escrow dispute resolution procedure. AR 606.

On September 3, 2021, Wilshire escrow officer Lim wrote a certified letter to HDLA explaining that Hangar had submitted the writ of possession and reported that Downing was no longer a tenant. AR 95. Hangar had requested the escrow funds because Downing did not voluntarily vacate the unit. AR 95. Lim requested that HDLA determine which party is entitled to the escrowed funds. AR 95. Wilshire sent the letter on September 9, 2021 and it was received by LAHD on September 15, 2021. AR 94. Hangar was not copied on Wilshire’s letter. See AR 95. Hangar was never contacted by the City to “conduct an investigation” as required by RAC Regulations section 967.05. AR 111.

On September 16, 2021, LAHD responded via letter to Wilshire that the escrow instructions conditions in which Wilshire must disburse all remaining funds to Downing were consistent with RAC Regulations section 966.00 et seq. AR 107. A judgment in a civil action has no effect on the release of relocation assistance fees from an escrow account unless such effect is intended by the court and expressly set forth in the judgment itself. AR 107. Hangar sought disbursement of the relocation funds based repossession through LASD, not on damages awarded in the unlawful detainer judgment. AR 107. LAHD determined that Wilshire must release to Downing the remaining escriw balance of $20,450. AR 107. LAHD mailed the September 16, 2021 decision to Wilshire and Lim on September 23, 2021. AR 3. The City did not include Hangar on the September 16 ,2021 letter. AR 107.

Lim notified Hangar of LAHD’s September 16, 2021 decision by email on October 4, 2021, stating that the decision had been received by Wilshire that morning. AR 605. Hangar replied that it would appeal this decision because Downing had been evicted for failure to pay rent. AR 605. Hangar also observed that Downing had withdrawn some of the relocation funds from escrow. AR 605.

On October 8, 2021, Hangar informed Lim by email that she had only sent the first page of the September 16, 2021 decision and needed to send the rest so that Hangar could see the email address to which it should send the appeal. AR 604. Wilshire sent both pages of the decision later that day, noting that the decision letter had no email address on it. AR 603. Per the escrow instructions, dispute resolution procedures required Wilshire to send notice to LAHD at an address on 7^th Street. AR 603.

On October 8, 2021, Hangar appealed the September 16, 2021 decision by mail to HALD. AR 111, 307. Hangar’s appeal claimed that it did not receive the September 16, 2021 decision until October 4, 2021. AR 111. As to the merits, the eviction of Downing was for his failure to pay pre-COVID-19 rent and not pursuant to the Ellis Act. AR 111. This meant that Downing was not entitled to Ellis relocation assistance. AR 111. Hangar requested the appeal procedure outlined in RAC Regulation section 986.00 et seq. AR 111. If LAHD believed that the appeal was untimely, Hangar asserted that COVID-19 stay at home orders tolled the deadline. AR 111.

On October 13, 2021, Hangar reminded Wilshire that the last day for Downing to request the disbursement of escrow funds had been October 5, 2021. AR 601. If Downing had not done so, Hangar requested that Wilshire release the funds to Hangar. AR 601. Wilshire replied that the City instructed it to withhold all funds until it made a final determination on the appeal. AR 601. Hangar replied that Downing’s October 5 deadline had elapsed, and the City did not have the authority to withhold funds. AR 600. If Wilshire did not release the funds, Hangar asked for its authority in choosing not to do so. AR 600. Hangar would seek reimbursement for fees and costs of enforcement if Wilshire made it necessary. AR 600. Wilshire reiterated that it could not do that and gave Hangar the contact information for the City employee with whom it spoke. AR 599-600.

On October 19, 2021, HDLA gave notice to Hangar, Wilshire, Downing, and other parties of a virtual appeal hearing scheduled for November 18, 2021. AR 323-38.

On October 29, 2021, Hangar forwarded all the emails between it and Wilshire to HDLA staff member Edward Jacobs (“Jacobs”). AR 598. Hangar asked Jacobs to explain the City’s reasons for not letting Wilshire release the $16,462 still in escrow. AR 598.

Documentary evidence presented for the hearing included: (1) a staff report (AR 341-43); (2) the Hangar’s appeal (AR 344-61); (3) Lim’s September 3, 2021 letter (AR 363-75); (4) the September 16, 2021 decision (AR 376-77); and (5) Hangar’s brief with exhibits (AR 378-494). AR 340.

Jacobs submitted a staff report that identified the reason for eviction as a Notice of Intent to Withdraw the rental unit per the Ellis Act. AR 341, 343. LAHD mailed the September 16, 2021 decision to Wilshire on September 23, 2021. AR 341, 343.

As to the amount in escrow, Downing withdrew $1,620 on December 14, 2018 and $2,368 on June 7, 2019, which left a balance of $16,462. AR 342. The staff report claimed that Downing requested the balance via email on August 21, 2021. AR 342.[4] Both the escrow instructions and RAC Regulations require that, before Wilshire can disburse outstanding escrow funds to the tenant, the tenant must first sign an affidavit that states that the unit has been permanently vacated, indicates the date of vacation, and provides current mailing addresses. AR 342. Wilshire did not provide a blank affidavit for Downing to fill out, and it has not released the balance to Downing. AR 342.

The current dispute stems from Wilshire’s letter on September 3, 2021, which notified the City that Hangar asserted that it should receive escrowed funds because Downing did not voluntarily vacate the premises. AR 342. LAHD stated in its September 16, 2021 decision that a judgment in a civil action will have no effect on the release of relocation assistance fees from an escrow account unless the court intends this effect and it is expressly set forth in the terms of the judgment. AR 343. Hangar did not seek the release of funds based upon a judgment, but rather upon the mere fact that a sheriff conducted a lockout of Downing. AR 343. LAHD decided that the remaining escrow balance must be released to Downing. AR 343.

Hangar’s appeal also was not timely because it was submitted on October 8, more than ten days after the September 23 mailing of the September 16, 2021 decision. AR 343. The argument raised in the appeal, that Downing was not entitled to relocation assistance because his tenancy was terminated for reasons other than under the Ellis Act, was novel. AR 343. It was not part of Wilshire’s September 3, 2021 email, which focused only on the sheriff’s lockout. AR 343.

As of October 25, 2021, the remaining balance of $16,462 remained in escrow pending the outcome of the appeal. AR 343.

At the November 18, 2021 hearing, Downing, Ada Cordero-Sacks, Esq. (“Cordero-Sacks”), Rodas, and Jacobs appeared and testified. AR 339. Lim appeared but did not testify. AR 339, 554. Jacobs presented the HDLA staff report. AR 522-28.

Cordero-Sacks testified that she is counsel for Hangar. AR 534. Hangar’s position is that Downing was evicted for non-payment of rent and therefore ineligible for relocation assistance. AR 534. The January 30, 2019 determination as to Downing’s disability or the amount of such assistance, if applicable, did not have any preclusive effect on this. AR 534-35.

Hangar received the September 16, 2021 decision from Wilshire on October 8, 2021 and appealed it the same day. AR 536. This caused the timeliness issues, but Hangar made the ten-day deadline. AR 536-37. LAHD itself never sent Hangar a copy of the decision. AR 537-38.

Hangar explained to Lim that it evicted Downing for failure to pay rent. AR 535. Cordero-Sacks and Lim had several back-and-forth emails in which Cordero-Sacks explained this was not an Ellis Act lockout. AR 536. A lockout for failure to pay rent is a permissible reason under the RSO and does not compel landlords to pay relocation fees. AR 536. Lim never sent Hangar a copy of the September 3, 2021 letter, so Hangar did not know whether Lim told LAHD that. AR 536. Cordero-Sacks attached the UD complaint and judgment with the 3-day notice to show that was the basis for eviction. AR 536.

She contended that it is undisputed that Downing’s eviction was for failure to pay rent, and even Downing’s declarations admit that fact. AR 540-41. In such a case, the landlord does not need to pay relocation assistance fees under LAMC section 151.09(A)(1), RAC Regulations section 962.01, or the escrow instructions. AR 540-41.

Assuming arguendo that the eviction qualifies Downing for relocation fees, if a landlord is required under any law to assist a tenant to relocate through the payment of relocation costs, CCP section 1179.03.5(b)(2) allows it to offset the tenant’s COVID-19 rental debt against that obligation. AR 541-42, 545. Downing owes $53,000 in past due rent, some of which accrued during the COVID-19 Local Emergency Period. AR 541. Although Downing claimed in court that there is about $28,000 in state funding and $2,000 in City money pending for payment of the past due rent, it is nowhere near the $53,000 that Downing owes. AR 542-43. If Hangar receives all the funding Downing claims, the $25,000 balance would still exceed the $16,462 left in escrow with Wilshire. AR 543-44. Hangar would also be entitled to the $4,000 or thereabouts that Downing withdrew. AR 544.

The hearing officer asked if there was any court order that listed the damages Downing owed or a period for which damages are to be collected. AR 560. Cordero-Sacks replied that a judgment and writ of possession would include a daily amount and that she could provide those documents. AR 560.

Downing testified that he is entitled to the remaining funds in the escrow account. AR 547. He is appealing the judgment in the UD complaint for several reasons. AR 547-48. One is that he did not pay the rent at issue because Hangar would not accept it during the first UD lawsuit in 2019. AR 551. Hangar knew it would lose that case, dropped it when the pandemic hit and an emergency was declared, and immediately declared due the rent that had accrued the previous month. AR 551. Hangar is not allowed to pursue COVID-19 rental debt until after the Local Emergency Period expires. AR 553.

Apart from that, the escrow instructions form a contract with Wilshire that defines the exit criteria under which Downing is entitled to the account balance and he has met them. AR 548. Nothing in the escrow instructions says that Downing has to leave or vacate the unit under specific circumstances. AR 548. This money already belongs to Downing and Hangar is just trying to rewrite history and claw it back. AR 550.

On October 7, 2021, the City informed Hangar and Downing that it had issued a $36,000 payment. AR 548-49. This was ERAP assistance for the period between June 2020 and August 2021. AR 549. Downing does not know if Hangar has received the money. AR 549.

Hangar has not received a $36,000 transaction from the City, but it expects to receive it soon. AR 555.

On December 3, 2021, the hearing officer issued a decision that awarded the escrow balance to Downing. AR 576, 582.

As to timeliness, Cordero-Sacks had testified that she received notice of the September 16, 2021 decision from Lim on October 8, 2021 and appealed it the same day. AR 578. Lim did not testify, and no other evidence explained when Wilshire received the determination or why it did not notify Hangar until 15 days after the determination was mailed to it. AR 578.

A notice of appeal was required to be submitted to LAHD no more than ten days after LAHD mailed the September 16, 2021 decision to the appellants. AR 579. Wilshire did not send LAHD the appeal until 15 days had passed, and there was no testimony or documentary evidence that showed why. AR 579. Hangar did not submit evidence to support its claim that the COVID-19 pandemic made delays in receipt and mailing expected. AR 579. No one submitted authority that a hearing officer can toll the appeal deadline. AR 579. The appeal was time-barred under RAC regulation 968.01. AR 579.

As for the merits, Hangar claimed that it should receive the funds in escrow under CCP section 1179.03.5(b)(2) because Downing owed $53,040 in unpaid rent. AR 578. Hangar did not provide documentary evidence that a court had ordered the tenant to pay back rent totaling $53,040 as part of the UD case or that the back rent consisted solely of COVID1-19 rental debt as required. AR 578. Hangar’s counsel characterized the $53,040 in back rent as consisting solely of pre-COVID-19 rent.

The writ of possession that Hangar submitted only entitled it to possession of the rental unit and a $40 fee. AR 578. It did not entitle Hangar to costs of judgment, principal rent due, or interest. AR 578. Even if a court had ordered that Downing pay $53,040 as COVID-19 rental debt, the City was in the process of paying Hangar $36,000, which would reduce the debt to $17,040. AR 578. The parties both indicated that Hangar has not yet received the $36,000. AR 578.

Res judicata and collateral estoppel precluded the appeal. AR 579. Res judicata bars not only issues that were litigated but issues that could have been litigated in earlier proceedings as long as the later-raised issues constitute the same cause of action involved in the prior proceeding. AR 579. Whereas the January 2019 decision concerned Downing’s entitlement to relocation fees after an Ellis Act eviction, this appeal concerned Downing’s entitlement to relocation fees after eviction for failure to pay rent. AR 579. Hangar argued the same tenant relocation fee cause of action against the same tenant and should not now be able to argue the same issue under slightly different facts. AR 579. The appellants’ choice in raising, litigating, and gaining a decision on this issue in 2019 precludes it from doing so in 2021 under res judicata. AR 579.

Collateral estoppel asks whether (1) the issue sought to be precluded is identical to that decided in a prior proceeding; (2) the issue was actually litigated and necessarily decided in the prior proceeding; (3) the decision in the prior proceeding is final and on the merits; and (4) the party against whom issue preclusion is asserted is the same or in privity with the party in the prior proceeding. AR 579. The same facts that support res judicata in this case support collateral estoppel. AR 579.

Hangar’s argument on both res judicata and collateral estoppel is that the issue in the January 2019 decision was the amount of the relocation fee to pay the tenant and this action challenges whether payment was improper. AR 580. The distinction is valid, but Hangar triggered the initial hearing when it attempted to remove Downing through an Ellis Act eviction. AR 580. At that point, it should have presented at the relocation hearing all the reasons it had to limit or prevent the tenant from receiving a relocation fee, whether for a certain amount or at all. AR 580. Hangar instead chose to dismiss that Ellis Act case after the appeal decision on the relocation fee, only to evict Downing for failure to pay rent. AR 580. Hangar had the chance to litigate the relocation fee before an LAHD hearing officer and used up that change in 2019. AR 580. Because Hangar is bound by the January 2019 decision, it must pay the $20,450 relocation fee amount so ordered, albeit less any amounts Downing already withdrew. AR 580.

The hearing officer denied the appeal for procedural reasons because it was untimely and barred by res judicata and collateral estoppel. As a result, all substantive arguments were moot. AR 580. The hearing officer did not discuss (1) whether the relocation fee should ever have been paid to the tenant in the first place, or (2) whether the remaining fee amount should be offset against back rent purportedly owed to Hangar. AR 580.

The hearing officer affirmed the September 16, 2021 decision and ordered that Wilshire pay the $16,462 in escrow to Downing and not Hangar. AR 580.

Petitioner Hangar seeks administrative mandamus to set aside the hearing officer’s decision on the basis that the appeal was timely and neither collateral estoppel nor res judicata barred its claims. Hangar also seeks traditional mandamus (a) ordering the City to correctly apply the RAC Regulations by contacting the parties and conducting an investigation before issuing a determination letter, (b) striking the RAC Regulations for failing to include a temporal and causal nexus link component between the the grounds for termination of a tenancy and the release of escrowed funds and, and/or (c) striking the RAC Regulations for failing to provide an offset as required by CCP section 1179.03.5.

LAHD shall issue a determination regarding the disbursement of the disputed funds within 15 days of notification by the escrow holder of the dispute. RAC Regulation §967.06. Any party to the dispute may appeal LAHD’s determination within ten days of LAHD’s mailing of its determination. RAC Regulation §968.01. The appeal must state why the appellant believes LAHD erred in its determination. RAC Regulation §968.02.

The hearing officer found that Wilshire did not send LAHD the appeal until 15 days had passed from LAHD’s mailing of the September 16, 2021 determination, and there was no testimony or documentary evidence that showed why. AR 579. Hangar did not submit evidence to support its claim that the COVID-19 pandemic made delays in receipt and mailing expected. AR 579. No one submitted authority that a hearing officer can toll the appeal deadline. AR 579. As a result, the appeal was time-barred under RAC Regulations section 968.01. AR 579.

Petitioner Hangar argues that the hearing officer’s finding that its October 8, 2021 appeal was untimely is not supported by the evidence since LAHD’s September 16, 2021 determination letter was never mailed to Hangar or its counsel; the determination letter was only addressed and mailed to Wilshire. The letter was not mailed until September 23 and not received by Wilshire until the morning of October 4, 2021. When Wilshire forwarded the letter to Hangar’s counsel, only the first page was received. Hangar’s counsel asked for the second page four days later on October 8, 2021. She received it and sent the appeal also on October 8.[5] Pet. Op. Br. at 20.

Hangar notes that the hearing officer’s application of the literal language of RAC Regulations section 968.02 means that Hangar had ten days from LAHD’s mailing of the determination letter on September 23, 2021, which was October 4, 2021, to file an appeal. The hearing officer’s decision would require Hangar to appeal before it received LAHD’s determination. Pet. Op. Br. at 20.

The City responds that Hangar’s appeal was submitted after the October 4, 2021 deadline and the hearing officer could not find any authority to support tolling. Wilshire submitted the request to LAHD to resolve the escrow dispute between Hangar and Downing consistent with the escrow instructions and the RAC Regulations. See AR 593; RAC Regulations §967.02. LAHD then mailed its determination to Wilshire. Hangar admits that its counsel received the first page of the determination on the day an appeal was due. Hangar could have submitted a timely appeal to LAHD that day because LAHD’s contact information is in the escrow instructions. Hangar does not explain why its counsel waited four days to request the second page. Given that Hangar gave no explanation why the appeal was late, the hearing officer did not abuse his discretion in declining to toll the deadline for appeal. Opp. at 10-11.

The City, and to some extent Hangar, focus on the wrong issue. Hangar is incorrect in contending that the date of its receipt of LAHD’s determination should trigger the ten-day period. Reply at 2. RAC Regulations section 968.01 expressly provides that an appeal must be filed “within ten days of LAHD’s mailing of its determination.” A requirement for appeal within a certain period from agency mailing is standard practice in notice statutes, and there is an obvious reason for it. An appellant may easily claim that the notice was not received and thereby obviate the running of the notice period. For this reason, most limitation provisions start the clock with the agency’s mailing of notice and actual receipt is not required.

More importantly, however, the City is incorrect that the hearing officer can rely on the passage of time from mailing to Wilshire only.[6] RAC Regulation section 967.06 provides that LAHD shall issue a determination regarding the disbursement of the disputed funds within 15 days of notification by the escrow holder of the dispute. It does not say what persons must receive notice of the determination.

But due process does. At a minimum, due process requires notice and an opportunity to be heard. Krontz v. City of San Diego, (2006) 136 Cal.App.4^th 1126, 1141. Any party to the dispute may appeal LAHD’s determination within ten days of LAHD’s mailing of its determination. RAC Regulation §968.01. Due process requires that the parties who are entitled to appeal receive notice of the September 16 determination. The parties consisted of Hangar, Downing, and Wilshire and all of three were entitled to notice of LAHD’s determination. Yet, LAHD failed to send its September 16 letter to either Hangar or Downing. The City’s notice did not comply with due process.

The City argues that, even if the hearing officer should have required notice to the parties – the City refers to this as “tolling” -- the error was not prejudicial. Hangar was still able to present evidence at the administrative hearing supporting the merits of its case, including 117 pages of argument and evidence. AR 383. The hearing officer accepted the evidence and rejected the appeal on additional grounds. Therefore, Hangar has not demonstrated how the hearing officer’s decision to find the appeal untimely was a prejudicial abuse of discretion.

The City is correct that a due process violation requires a showing of prejudice. Krontz v. City of San Diego, supra, 136 Cal.App.4^th at 1141 (delay in notice and opportunity to be heard requires prejudice). Prejudice will not be presumed; actual prejudice must be shown in order to be balanced against a due process violation. People v. Belton, (1992) 6 Cal.App.4^th 1425, 1433 (delay in filing criminal charges requires balancing of prejudice against justification for delay). It is obvious that Hangar was prejudiced by the lack of notice because the hearing officer denied the appeal as untimely. The mere fact that he also denied the appeal on other grounds (which also were wrong; see post) does not undermine this fact. The hearing officer did not reach the merits issues because he considered the appeal untimely. Greater prejudice cannot be shown from the lack of notice.

The hearing officer failed to proceed in the manner required by law when he denied the appeal as untimely based on the literal language of RAC Regulation section 967.06.[7]

2. The City’s Failure to Contact the Parties and Investigate Under RAC Regulation Section 967.05

The escrow holder shall notify LAHD, to the attention of the Director of the Rent Division, within five business days of the request for HDLA relocation of a dispute. RAC Regulations §946.03. HCIDLA shall contact the parties within five working days of notification by the escrow holder of the dispute to conduct an investigation. RAC Regulations §967.05.

Hangar argues that the City failed to investigate the dispute and contact all parties within five days as required by RAC Regulations section 967.05. The City received Wilshire’s September 3, 2021 dispute letter on September 15, 2021. Instead of contacting the parties and conducting an investigation, LAHD issued the September 16, 2021 determination letter without contacting any party. The obvious purpose of mandating that the City contact the parties for its investigation is to garner all the relevant facts before rendering a decision. LAHD’s failure to follow RAC Regulations section 967.05 was a failure to proceed in the manner required by law. Pet. Op. Br. at 20-21; Reply at 6.

The City correctly responds (Opp. at 11-12) that Hangar’s administrative mandamus claim seeks review of the hearing officer’s decision, not the underlying actions of LAHD. Hangar fails to show that this issue was presented to the hearing officer. As such, it is waived.[8] Lindeleaf v. Agric. Labor Relations Bd., (1986) 41 Cal. 3d 861, 869-70 (waiver is the general rule when parties fail to exhaust their administrative remedies).

Additionally, it is not clear that LAHD violated RAC Regulations section 967.05. Wilshire presented the dispute to LAHD as instructed by the escrow instructions (AR 97) and as required by RAC Regulations section 967.02. LAHD then decided not to contact the parties, apparently believing that it had sufficient information from Wilshire. At least arguably, LAHD has discretion under the regulation to “investigate” and issue a determination where it considers the answer to be clear without a need to contact the parties. Without such discretion, slavish adherence to the regulation would be a waste.

In any event, the City also is correct (Opp. at 12) that any error was not prejudicial because Hangar exercised its right to appeal and presented evidence to the hearing officer. Krontz v. City of San Diego, supra, 136 Cal.App.4^th at 1141.

3. The City’s Failure to Release the Escrowed Funds After 65 Days Pursuant to RAC Regulations Section 969.03

The owner may request return of any remaining funds to the owner only if the tenants are in legal possession of the subject unit and the eviction is no longer in process, or if the tenants have vacated the subject unit and unclaimed funds remain in escrow 65 days after the date the tenants vacated the unit. RAC Regulations §969.03.

Hangar argues that Jacobs’ November 1, 2021 staff report to the hearing officer twice references an August 21, 2021 email from Downing requesting release of the escrowed funds to him. AR 341-43. No such email is in the Administrative Record.

On October 13, 2021, Hangar repeatedly requested the escrowed funds’ release, averring that the 65 days required by RAC Regulations section 969.03 had lapsed. AR 601. This request was made by Hangar without knowing about LAHD’s September 16 determination letter or that Downing had requested the remaining escrow funds while owing Hangar at least $53,000. LAHD telephonically instructed Wilshire to hold the funds. AR 600-01. Having never having seen Downing’s purported email or LAHD’s determination, Hangar could not comprehend why LAHD was refusing to release the funds. AR 600. Had LAHD conducted the investigation required by RAC Regulations section 967.02, this confusion could have been avoided. Pet. Op. Br. at 21.

Hangar was legitimately confused, but the facts in the record show why the funds were not released. Pursuant to RAC Regulations section 969.03, Wilshire was required to release the escrowed funds to Hangar 65 days after Downing was locked out of his unit, or October 7, 2021, absent a reason not to do so. That reason consists of LAHD’s September 16 determination that Downing was entitled to the escrowed funds. As a result, LAHD was entitled to direct Wilshire not to release the funds to Hangar. Additionally, as the City points out (Opp. at 12), Hangar failed to pursue this issue before the hearing officer, and it is waived. Lindeleaf v. Agric. Labor Relations Bd., supra, 41 Cal. 3d at 869.

The hearing officer found that res judicata and collateral estoppel precluded the appeal, stating that res judicata bars not only issues that were litigated but issues that could have been litigated in earlier proceedings, as long as the later-raised issues constitute the same cause of action involved in the prior proceeding. AR 579. Whereas the January 2019 decision concerned Downing’s entitlement to relocation fees after an Ellis Act eviction, this appeal concerned Downing’s entitlement to relocation fees after eviction for failure to pay rent. AR 579. Hangar argued the same tenant relocation fee cause of action against the same tenant and should not now be able to argue the same issue under slightly different facts. AR 579. The appellants’ choice in raising, litigating, and gaining a decision on this issue in 2019 precludes it from doing so in 2021 under res judicata. AR 579.

The hearing officer noted that Hangar argued that the January 2019 decision decided the amount of the relocation fee for Downing and this action challenges whether payment was improper. AR 580. The distinction is valid, but Hangar triggered the initial hearing when it attempted to remove Downing through an Ellis Act eviction. AR 580. At that point, Hangar should have presented at the relocation hearing all the reasons it had to limit or prevent the tenant from receiving a relocation fee, whether for a certain amount or at all. AR 580. Hangar instead chose to dismiss the Ellis Act court case after the LAHD appeal decision on the relocation fee, only to evict Downing for failure to pay rent. AR 580. Hangar had the chance to litigate the relocation fee before a hearing officer in 2019 and is bound by the January 2019 decision. AR 580. Therefore, it must pay the $20,450 relocation fee amount so ordered, albeit less any amounts Downing already withdrew. AR 580.

Hangar argues that the hearing officer abused his discretion by applying the principles of collateral estoppel to these undisputed facts. LAHD ruled on January 30, 2019 that Downing was disabled, reclassified him as a Qualified Tenant, and correspondingly increased his relocation benefit amount from $10,750 to $20,450. This Qualified Tenant determination in 2019 has nothing to do with the August 2021 issue whether Downing was entitled to any relocation benefit at all since he was evicted for cause -- i.e., failure to pay rent -- not a not-for-cause reason such as under the Ellis Act. Even Jacobs informed the hearing officer that the January 2019 hearing pertained to the amount due to Downing and not whether, two years later, he should be entitled to those escrowed funds, an issue that had not yet arisen in 2019. AR 529. Pet. Op. Br. at 22-23.

Hangar notes that Downing was the appellant for the January 2019 hearing, not Hangar. Thus, the hearing officer’s finding that “…appellants triggered the initial hearing” is not supported by the evidence. Additionally, the hearing officer’s statement that Hangar was required to present at the 2019 relocation hearing all of its reasons to limit or prevent Downing from receiving a relocation fee presupposes that Hangar somehow had a crystal ball to anticipate COVID-19’s havoc on the courts, that Downing would fail to leave in November 2019 as required by the Ellis Act, and that he would stop paying rent, incurring over $53,000 in rental debt. Hangar could not have presented Downing’s eviction for failure to pay rent in August 2021 at a January 2019 hearing to determine Downing’s disability status. Pet. Op. Br. at 24.

Res judicata, also known as claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Mycogen Corp. v. Monsanto Co., (“Mycogen”) (2002) 28 Cal.4th 888, 896. Res judicata serves to prevent inconsistent rulings, promote judicial economy by preventing repetitive litigation, and protect against vexatious litigation. Federation of Hillside and Canyon Associations v. City of Los Angeles, (“Federation”) (2004) 126 Cal.App.4th 1180, 1205. A judgment on the merits is res judicata and is conclusive on all issues that were raised or could have been raised in the prior proceeding. Id. at 1205. Res judicata applies if (1) the decision in the prior proceeding is final and on the merits, (2) the present proceeding is on the same cause of action as the prior proceeding, and (3) the parties in the present proceeding (or parties in privity with them) were parties to the prior proceeding. Id. at 1202.

Collateral estoppel differs from res judicata. Under collateral estoppel (issue preclusion), once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude the re-litigation of the issue in a suit on a different cause of action involving a party to the first case. San Remo Hotel, L.P. v. City & County of San Francisco, (2005) 545 U.S. 323, 336. Collateral estoppel prevents re-litigation when the following factors are met: (1) the issue is identical to an issue decided in a prior proceeding; (2) the issue was actually litigated; (3) the issue was necessarily decided; (4) the decision in the prior proceeding is final and on the merits; and (5) the party against whom collateral estoppel is asserted was a party to the prior proceeding. Gabriel v. Wells Fargo Bank, N.A., (2010) 188 Cal.App.4^th 547, 556. In order to avoid piecemeal litigation, a judgment is conclusive not only as to the issues actually decided, but those that might have been raised as well. Thibodeau v. Crum, (1992) 4 Cal.App.4th 749, 754; Sych v. Insurance Co. of North America, (1985) 173 Cal.App.3d 330.

Collateral estoppel requires an analysis of the entire record of the prior proceeding in order to determine whether the precise issue was raised and determined. Santa Clara Valley Transportation Authority v. Rea, (2006) 140 Cal.App.4^th 1303, 1311-12. Submission of only the final decision rendered by the administrative authority has been held to be insufficient evidence that an issue was actually litigated. Id.

Both res judicata and collateral estoppel apply to administrative adjudications. Although res judicata is more flexible in the context of administrative orders (George Arakelian Farms, Inc. v. Agricultural Labor Relations Board, (1989) 49 Cal.3d 1279, 1290), prior administrative decision may preclude a subsequent administrative action under either doctrine.

As Hangar notes (Reply at 5), the City’s opposition does not address the res judicata/collateral estoppel issue. This omission is for good reason because the hearing officer again was wrong. There is no possibility that Hangar’s appeal is barred by res judicata or collateral estoppel.

With respect to res judicata, the 2019 hearing decision was made on the merits, and the parties in the two proceedings were the same, but the causes of action in the 2019 and 2021 hearings were not the same. The res judicata doctrine is based on the primary right theory of a cause of action with a primary right, a primary duty, and a wrongful act breaching that duty. Mycogen, supra, 28 Cal.4^th at 904. Downing’s primary right in his 2019 appeal was his right to receive a higher relocation fee under LAMC section 151.09(G) for Hangar’s removal of the unit permanently from rental housing use under the Ellis Act (Govt. Code §7060 et seq.). The primary duty and breach of duty was LAHD’s refusal to require payment of the higher amount. For the 2021 hearing, Hangar’s primary right was the right to not pay any relocation fee based on Downing’s eviction for cause and not under the Ellis Act. The primary duty and breach of duty was LAHD’s refusal to recognize this right. The causes of action in the two administrative proceedings were not identical. In fact, Hangar is correct that its cause of action for the 2021 hearing did not arise until Downing failed to leave in November 2019 as required by the Ellis Act, stopped paying rent, and was evicted for that reason on August 3, 2021.

For similar reasons, collateral estoppel has no application. The 2019 decision was final, and on the merits, and Hangar was a party to that proceeding. However, the issues in the 2019 and 2021 hearings were not identical. Hence, the issues for the 2021 hearing were not actually litigated or decided in 2019. The hearing officer seemed to think that Hangar, having removed the unit from the market under the Ellis Act, was obligated to raise all arguments concerning relocation benefits in a single proceeding. The hearing officer cited no law for this proposition, which has nothing to do with collateral estoppel anyway.[9] Collateral estoppel does not apply to bar Hangar’s 2021 claim.

In sum, Hangar’s appeal was timely and neither collateral estoppel nor res judicata barred its claims, which should have been considered on their merits. Therefore, administrative mandamus must be granted, the hearing officer’s decision must be set aside, and the case must be remanded for LAHD to consider Hangar’s arguments on the merits.

“966.01 The escrow instructions shall provide that the tenant(s) sign an affidavit confirming vacation of the subject unit, indicating the date of the vacation, and a forwarding mailing address. The affidavit shall include a statement that the tenant has permanently departed from the unit and surrendered the keys to the landlord.”

“966.02 The escrow instructions shall provide for release of all remaining funds owing to the tenant(s) within 3 business days of presentation of an affidavit that conforms to Section 966.01.”

Hangar seeks traditional mandamus to compel LAHD to prospectively correct its flawed interpretation and misapplication of these two RAC Regulations, which are silent, or assume that the vacatur of the tenant is premised, on the no-fault Ellis Act reasons that occasioned the relocation benefits to be escrowed. Hangar notes that an agency is authorized to “fill up the details” of the statutory scheme. However, it does not have discretion to promulgate regulations that are inconsistent with the governing statute, alter or amend the statute, or enlarge its scope. Slocum v. State Bd of Equalization, (2005) 134 Cal.App.4th 969, 974. Pet. Op. Br. at 25.

Hangar concludes that the regulations have no causal nexus between a no-cause eviction and the escrowed relocation benefits. By February 1, 2023 -- when the local State of Emergency will finally be lifted -- no-fault evictions, such as those under the Ellis Act, may resume. At that point, there will have been just about three years (March 2020 through April 2023), in which a tenant with escrowed funds could be evicted for a for-cause reason such as failure to pay rent yet still draw from the escrowed funds. This is not the intent of the RSO, which requires relocation assistance be paid to the tenant “if the termination is based on the grounds set forth in Subdivisions 8., 10., 11., 12, or 13.” LAMC §159.09(G). Hangar argues that the RAC Regulations do more than permissibly fill up the details of the statutory scheme. They ignore the RSO statutory scheme by not requiring that the release of the escrowed funds be “based on the grounds” set forth in the RSO. Pet. Op. Br. at 25.

Further, the regulations at issue lack a temporal requirement. An Ellis Act termination to remove a unit from the rental housing use requires a 120-day notice, which may be extended up to one year. An Ellis Act termination for owner-occupancy requires a 60-day notice. The landlord can serve a 60-day owner occupancy notice, escrow the funds, and then the tenant may refuse to leave. An unlawful detainer action may take up to one year to adjudicate since the courts are backed up, and yet the tenant still collects the escrowed funds, even though one year has passed from the expiration of the notice to the sheriff lock-out. In sum, the RAC Regulations at issue are void because they are inconsistent with the RSO. Pet. Op. Br. at 25.

Hangar’s position is inconsistent the regulations and the facts. The pertinent RSO provision is LAMC section 151.09(G), pursuant to which a landlord removing a rental unit from the housing market under the Ellis Act must pay relocation assistance to the tenant. At the owner’s sole discretion, the owner may pay the relocation fee due to a tenant pursuant to LAMC section 151.09.G by depositing the fee in an escrow account within 15 days of service of a notice of termination of tenancy. RAC Regulation §964.01.

Hangar terminated Downing’s tenancy to remove the Property from rental housing use under LAMC section 151.09(A)(10) and was obligated to pay relocation assistance under LAMC section 1541.09(G)(2). Hangar chose to open an escrow account to distribute that money to Downing, but that does not change the underlying fact that Hangar had already terminated Downing’s tenancy on a ground that entitled him to relocation assistance. Indeed, without the escrow account, Hangar would have had to pay Downing the relocation assistance within 15 days of its notice that Downing’s tenancy was terminated. LAMC §151.09(G)(2). In 2019, Hangar even sued Downing to recover possession of his rental unit based on LAMC section 151.09(A)(10), for which relocation assistance is required. Hangar eventually dismissed the unlawful detainer action, but never paid Downing the full amount of relocation to which he was entitled for termination of his tenancy.[10]

The City relies on the escrow instructions and argues that, when Downing moved out of his rental unit, he met the terms of the escrow instructions and the rest of the money was his. See Gelber v. Cappeller, (1956) 161 Cal. App. 2d 113, 120. Hangar argues that it is entitled to a return of the escrowed funds because it recovered legal possession of the unit on another ground, but that is not what the escrow instructions say. AR 97. Opp. at 13.

Hangar replies that escrowed funds only belonged to Downing if he vacated voluntarily in November 2019. He did not. The service of a termination notice (at-fault or no-fault) does not terminate the tenancy. Rather, it merely begins the long and arduous process of obtaining a judgment for possession, then executing on that judgment through a writ enforced by the sheriff’s office. The summary possession statutes (unlawful detainer and forcible entry and detainer (CCP §1159 et seq.)) set forth the procedural mechanism for effecting a lawful eviction. These procedures replace the common law “self-help” repossession remedy. Daluiso v. Boone, (1969) 71 Cal. 2d 484, 495; Jordan v. Talbot, (1961) 55 Cal 2d 597, 605. Either a restoration of the premises is voluntarily obtained from the tenant, or involuntary obtained from the sheriff. But a landlord may never obtain possession by themselves by merely serving a notice. Thus, the service of a notice only starts the process, it surely does not terminate the tenancy.

Hangar is confusing termination of the tenancy with eviction. They are two different concepts. As the RSO makes plain, service of a notice to recover possession of a rental unit terminates the tenancy through any extension required for tenant age or disability. LAMC §§151.09(C)(4)(termination of tenancy for permanent withdrawal of unit); see LAMC §151.23(B) (date of withdrawal of the tenant accommodations shall be extended to one year for qualified tenant). Whether the landlord must evict the tenant through unlawful detainer because the tenancy has terminated is a different issue.

In this case, Hangar terminated Downing’s tenancy to remove the unit permanently from the housing market under the Ellis Act. It initially filed an unlawful detainer to evict Downing under the Ellis Act, dismissed it, and then filed a second unlawful detainer for non-payment of rent. If Hangar wanted to avoid paying Downing’s relocation benefits under the RSO, it should have withdrawn its Ellis Act tenancy termination. So long that termination remained in place, Downing was entitled to relocation benefits no matter whether he was evicted for non-payment of rent.

In reply, Hangar argues that, had LAHD performed its obligation under the RAC Regulation section 967.05, it would have learned that Downing’s eviction was for failure to pay rent and that he never submitted the affidavit required by RAC Regulation section 966.01, which is a condition precent to obtaining the escrowed funds. Hangar submits that Downing could not submit the missing affidavit because he could not attest to “surrender[ing] the keys to the landlord” as required by RAC Regulations section 966.01. He never did surrender the keys and instead was forcibly removed by LASD. Since the release of the escrow funds (RAC Regulations §966.02) is conditioned on the receipt of the RAC Regulations section 966.01 affidavit, LAHD acted in excess of its jurisdiction when it ordered the funds be released to Downing. Reply at 3-4. Hangar adds that the City’s argument that Downing met the terms of the escrow instructions is not factually correct. Downing did not voluntary vacate, never submitted the affidavit, never provided his forwarding address, and never surrendered the keys. Reply at 8.

Moreover, Hangar’s argument addresses its points about the causal connection to no-cause Ellis Act termination and a temporal requirement. RAC Regulations sections 966.00-02 require the tenant to provide an affidavit and surrender keys, which does not happen in an eviction. If LAHD did not follow these regulations, that is an issue to be raised to the hearing officer on remand. But it is not a reason not set aside the regulations.

CCP section 1179.03.5 limits the circumstances in which a court may find a tenant guilty of an unlawful detainer. CCP §1179.03.5(a)-(b). CCP section 1179.03.5(b)(2) provides: “A landlord who is required to assist the tenant to relocate pursuant to Section 1946.2 of the Civil Code or any other law, may offset the tenant’s COVID-19 rental debt against their obligation to assist the tenant to relocate. “COVID-19 rental debt” is defined as unpaid rent of a tenant under the tenancy that came due during the covered time period. CCP §1179.02(c). The “covered time period” means the time period between March 1, 2020 and September 30, 2021. CCP §1179.02(a).

Although the hearing officer declined to finally rule on the issue (AR 580), he noted that Hangar claimed an offset from the escrow funds under CCP section 1179.03.5(b)(2) because Downing owed $53,040 in unpaid rent. AR 578. Hangar did not provide documentary evidence that a court had ordered Downing to pay back rent totaling $53,040 as part of the UD case or that the back rent consisted solely of COVID-19 rental debt. AR 578. Hangar’s counsel characterized the $53,040 in back rent as consisting solely of pre-COVID-19 rent which is not available for relocation benefits offset. Even if a court had ordered that Downing pay $53,040 as COVID-19 rental debt, the City was in the process of paying Hangar $36,000, which would reduce the debt to $17,040. AR 578. The hearing officer acknowledged that the parties both indicated that Hangar has not yet received the $36,000. AR 578.

The City argues that the hearing officer correctly found that the UD judgment did not order any back rent damages. Thus, there was no basis to garnish the escrow account for some unproven debt. CCP section 1179.03.05(b)(2) permits landlords to offset, which presumably would occur in a civil action or unlawful detainer proceeding for unpaid rent after damages are proven. Hangar has not established that it can essentially garnish the escrow account without proving up Downing’s debt. Opp. at 13-14.

This argument runs contrary to the language and intent of CCP section 1179.03.5(b)(2), which is that a landlord who is required to assist the tenant to relocate may offset the tenant’s COVID-19 rental debt. Although the provision is contained in a statute concerning unlawful detainer actions, it contains no requirement that the debt be reduced to a civil judgment for the offset to occur. The purpose of CCP section 1179.03.5(b)(2) appears to be that, while a landlord generally cannot evict a tenant for non-payment of rent during the COVID-19 period of March 1, 2020 to October 1, 2021 (CCP §1179.03.5(a)(1)), and may not recover COVID-19 rent as damages during that period (CCP §1179.03.5(a)(2)(B)), the landlord should not be required to pay relocation assistance – which is awarded administratively and not in a civil case – without being able to offset the amount of COVID-19 rent owed. It runs contrary to this purpose to allow LAHD to award relocation benefits to a tenant and ignore the statutory offset.[11] No civil judgment is required for the offset.

Hangar argues that the RAC Regulations do not permit an offset under CCP section 1179.02(c) and should be stricken. Pet. Op. Br. at 26. That is not the appropriate remedy and Hangar does not even suggest what regulation should be voided. Rather, the hearing officer should be required to address the amount of offset on remand.

The City argues that Hangar’s facial challenge to the RAC Regulations for escrow accounts is time barred. A facial challenge to a regulation must be made within three or four years of its enactment. CCP §338(a) (three-year statute of limitations for “an action upon a liability created by statute other than a penalty or forfeiture”); CCP §343 (four year “catch all” statute of limitations); Travis v. Cty. of Santa Cruz, (“Travis”) (2004) 33 Cal.4th 757, 771-72 (statute of limitations for facial challenge runs from the date a regulation becomes effective; CCP section 338(a) applied to claim for preemption of ordinance). The RAC Regulations were enacted in 2009, over 12 years before the Petition was filed. Under any applicable statute of limitation, this facial challenge comes too late. Opp. at 14.

The City implicitly admits that a facial challenge may be included as part of an as-applied challenge. Travis, supra, 33 Cal.4th at 769. The City argues that, even if Hangar’s challenge to the RAC Regulations is a timely as-applied challenge, Hangar has not identified any basis for prospective relief or an order requiring revision of the RAC Regulations in the manner Hangar seeks. See PaintCare v. Mortensen, (2015) 233 Cal. App. 4th 1292, 1304 (when regulation is challenged on ground that it is not reasonably necessary to effectuate purpose of statute, judicial inquiry is “confined to whether the rule is arbitrary, capricious, or without rational basis”). Opp. at 14-15.

The RSO gives authority to the RAC to establish regulations for a landlord’s escrow account to pay relocation assistance to its tenants. The RAC Regulations explicitly state that they apply when landlords wish to evict to leave the rental market under LAMC section 151.09(A)(10). That is consistent with the RSO. Further, the RAC Regulations state what must at a minimum be included in escrow instructions. If Petitioner perceived that the RAC Regulations contain gaps, its escrow instructions could fill those in. But that does not mean the regulations are arbitrary or capricious. Opp. at 15.

Hangar argues that the RAC Regulations’ lack of a temporal requirement, as well as a requirement that the vacatur of the tenant be premised on one of the RSO reasons that require relocation payments in the first instance, conflicts with LAMC section 151.09 (G). The RSO only requires relocation in specified no-fault reasons such as the Ellis Act. See LAMC 151.09 (G). It does not require relocation where the tenant is evicted for an at-fault reason, such as failure to pay rent or violation of a lease term. Therefore, a traditional writ should issue for the RAC Regulations, especially in light of CCP section 1179.03.5 mandating an offset. Reply at 9.

As already explained, both the causal connection and the temporal requirement that Hangar is looking for are contained in RAC Regulations section 966.00-02, which do not conflict with LAMC section 151.09(G). The court agrees that LAHD should apply CCP section 1179.03.5’s offset. But nothing in the RAC Regulations is inconsistent with the offset statute. Finally, while the court believes that RAC Regulations section 967.06 should be amended to ensure that the parties receive notice, Hangar does not seek this relief. Moreover, an amendment would merely clarify the regulation, not remedy an inconsistency.[12]

The Petition’s administrative mandamus claim to set aside the hearing officer’s decision based on the contention that the appeal was timely and is not barred by either collateral estoppel or res judicata is granted. A judgment and writ shall issue to that effect and the case will be remanded for further proceedings on the merits consistent with this decision.

Hangar’s traditional mandamus claim seeking to compel the City (a) to correctly apply the RAC Regulations by contacting the parties and conducting an investigation before issuing a determination letter, (b) strike the RAC Regulations for failing to include a temporal and causal nexus link component between the release of escrowed funds and the grounds for termination of tenancy, and/or (c) strike the RAC Regulations for failing to provide an offset as required by CCP section 1179.03.5 is denied. A facial challenge to the RAC Regulations is time-barred and Hangar’s as-applied challenge is addressed by the proper interpretation of the Regulations.

Hangar’s counsel is ordered to prepare a proposed judgment and writ of mandate, serve them on the City’s counsel for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment and writ along with a declaration stating the existence/non-existence of any unresolved objections. An OSC re: judgment is set for March 21, 2023 at 1:30 p.m.

[1] Hangar’s 22-page opening brief and 11-page reply violate the respective 15 and ten-page limits of CRC 3.1113(d), as well as the court’s order at the September 6, 2022 trial setting conference. The footnotes in both briefs also violate the 12-point font requirement of CRC 2.104. The court has exercised its discretion to the briefs without reading the footnotes. Hangar’s counsel is admonished to read CRC 3.1113(d) and 2.104 and to follow the court’s orders in future cases.

[2] Hangar requests judicial notice of (1) City Ordinance No. 186585 (“Ordinance 186585”), effective March 31, 2020 (Pet. RJN Ex. 101); (2) City Ordinance No. 186606 (“Ordinance 186606”), effective May 12, 2020 (Pet. RJN Ex. 102); (3) a printout from the City’s Ellis dashboard (Pet. RJN Ex. 103); and (4) RAC regulations sections 960.00 through 969.05 (Pet. RJN Ex. 104). Requests Nos. 1-2 and 4 are granted. Evid. Code §452(b). Request No. 3 is denied. The City’s Ellis Act dashboard is not an official agency act. See Evid. Code §452(c).

The City requests judicial notice of (1) Los Angeles Municipal Code (“LAMC”) section 151.02 et seq. (RJN Ex. A); and (2) Los Angeles Administrative Code (“LAAC”) section 22.601. The requests are granted. Evid Code §452(b).

[3] The page cited by Hangar (AR 47) does not so state. However, it appears undisputed that Hangar granted the extension.

[4] Hangar notes that Downing’s email was never given to Hangar and is not in the record. Pet. Op. Br. at 10.

[5] Hangar speculates that the delays in Wilshire’s receipt of the City’s September 16 letter and in the City’s receipt of Wilshire’s earlier September 3, 2021 dispute letter were due to COVID.

[6] In fact, the hearing officer seems to have misunderstood that LAHD’s determination letter was “mailed to the appellants”. AR 579. He also misunderstood that the appeal was sent to LAHD “by Wilshire”. AR 579. Neither is true.

[7] Obviously, RAC Regulations section 967.06 should be modified to ensure that the parties who have the right to appeal receive proper notice.

[8] The City is simply wrong in arguing that “by the time LAHD received Wilshire Escrow’s request, the deadline to initiate any investigation had passed”. Opp. at 12. The required investigation does not begin until LAHD’s receipt of a dispute letter. RAC Regulations §967.05.

[9] Collateral estoppel also requires an analysis of the entire record of the prior proceeding to determine whether the precise issue was raised and determined; the hearing officer was not entitled to rely solely on the final 2019 decision. See Santa Clara Valley Transportation Authority v. Rea, supra, 140 Cal.App.4^th at 1311-12.

[10] Hangar stopped accepting rent from him for months before dismissing the unlawful detainer lawsuit, which the City argues was done to set up a second unlawful detainer lawsuit for non-payment of rent. AR 356. Opp. at 13, n. 2.

[11] Hangar notes that Downing admitted that he owed back rent (AR 385) and that it is undisputed that Downing would still owe Hangar at least $25,000. Reply at 9-10.

[12] Hangar adds that the City failed to seek leave of court it filed the Amended Answer 63 days after its Answer. Therefore, the court should not consider their statute of limitations defense. Reply at 8. This is not the proper remedy for failure to seek leave to amend. Hangar should have filed a motion to strike if it believed the Amended Answer was improper.